MUMBAI, July 20: The Federal Bank has initiated legal proceedings against the high-profile horticulture company, Indo-French Biotech Enterprises Ltd, promoted by Atul Bhagawati, Kumudchandra C Bodiwala and R R Rayarikar and co-promoted by public sector MMTC Ltd.

While the Nashik based company with an equity of Rs 33 crore has been facing severe financial crunch and a prolonged labour unrest, the Federal Bank which extended a high-tech agricultural loan of Rs 6 crore has filed a suit to attach the company's land.

``We have given a high-tech agricultural loan on the basis of the company's projections. We have to attach the property as the company has been negotiating with third parties to sell the land. We have put the first charge on the said property,'' said a Federal Bank official.

Bodiwala could not be contacted at their Mumbai and Nashik offices in spite of repeated attempts by The Indian Express. The company had acquired additional 400 acre of land in Nashik and Raigad district of Maharashtra in addition to the another 604 acres acquired earlier to cultivate grapes and strawberry.

The company made waves in the Bombay Stock Exchange during its public issue in September 1994 and it was oversubscribed by over 91 times! The working of IFBEL was severely crippled by a prolonged strike at its Nashik plant.

``Due to labour unrest and strike at Nashik plantation the plantlets got damaged, destroyed and infected. Cultivation of 270 acres plants of grapes and strawberry on 140 acres got totally destroyed causing a loss of around Rs 8 crore,'' sources said.

The company's profit came down from Rs 11.24 crore in March 1995 to Rs 4.40 crore in March 1996 and it recorded a net loss of Rs 72 lakh during the first half of 1996-97.

IFBEL incorporated in November 1992 is engaged in the high-tech corporate horticulture, cultivating and processing strawberry and grapes for domestic and export market.

The company with one of the largest grape vineyards and strawberry orchids and a large capacity pre-cooling and cold storage units has a processing unit for making raisings, frozen strawberries and jams. Its products are sold under the brand name `Hollywood Delight'.

According to Federal Bank, the company has taken a huge loan against the security of a property within the area of Nalwada in Nashik and hypothecating movable assets etc lying in their plant in Dindori Tahsil of Nashik. ``It is learnt that the company is about to dispose of the propoerty to defraud creditors.

The bank is filing suit against the company and attaching the property before the judgement,'' sources said.

The unprecedented response to the company's public issue prompted the promoters to raise funds through private placements for Indo-Global Biotech Ambience Ltd (IGBAL) to develop a health resort at Igatpuri in Maharashtra, but the project has not been implemented.

The company raised Rs 33.50 crore from the public at Rs 20 per share during 1995-96 to finance a Rs 128 crore `Multi-theme Haven and Floriculture - a heaven on earth' but the project has not made any progress.

The glossy issue document before the public issue mentioned Atul Bhagwati, Ramachandra Rayarikar and Maj Kumudchandra Bodiwala as promoters. Atul Bhagawati has resigned from the company.

``Bhagawati is not associated with Indo-French Bio-Tech or Indo-Global Biotech Ambience. He has resigned from these companies,'' said his spokesman. In fact the company wanted to raise another Rs 50 crore from the capital market, but the poor market jeopardized their schemes. ``It will take more time to complete,'' said a company spokesman. The company projected Rs 124.68 crore sales and Rs 40 crore profit during 1996-97, and Rs 140.46 crore sales and Rs 46 crore profit during 1997-98. IFBEL shares are now quoting at Rs 3 per share.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.